SM: How did you actually get ClubPlanet going? You were working on it on the side, so did you just leave once you had enough revenue to support your cost of living?
AF: My philosophy at that time was that when other people were sleeping I would be working, when they were on vacation I would be working, and when they were goofing off I would be working. The business started growing rapidly and I decided it was an interesting opportunity, but I was not sure if I wanted to be known as a nightlife guy. I ended up starting an ISP, which I ran from the middle of 1997 through December 1999, when I sold it. That business really exploded.
During that time I had also purchased a CD-ROM business that we turned into a Web design shop. That was going well also. Throughout that entire time I treated the nightclub business as a sister business to all the other businesses. It was just the little engine that could. Every quarter it got bigger and bigger. I finally sold off all my other businesses, and in July 2002 I dedicated myself full time, with no outside distractions, to the nightlife business. In 2002, the business had about $2 million in revenue and was highly profitable. Today we are north of $30 million in revenue with no investors.
SM: What happened when you quit your job in 1996? What was your immediate next step?
AF: I worked out of my apartment. I had a slight panic attack and realized I had to make it work. I just stuck to my roots. As a consumer I wanted good information, and I wanted a service. The service I wanted was good access to nightlife establishments. When I say access, I mean I wanted the ability to get in the front door and pretend that I knew somebody even if I didn’t.
I would meet with club owners and their management teams and teach them about the Internet. In those days people did not understand that people would sign up on the Internet to go to a nightclub. I created a performance mechanism in the form of a guest list feature. Slowly but surely it started becoming more and more important for their marketing.
Clubs would buy ads on my website for $1,000 or so, but it would drive 500 people to their club. It became a high-impact business. Today we have over 2,300 customers, but in those days every single customer was somebody whom I went and spoke to in person. When you think of the people who move to NYC every year, they more so than anyone want to go out. We were a perfect vehicle for them. We just hit the wave at the right time.
SM: How did the people who go to nightclubs find you?
AF: It was all word of mouth. It was your typical viral experience with consumers. By 1997 we had expanded into Miami. By 1998 and 1999 we were in Los Angeles and Chicago. Today we are everywhere. In those days the idea was to stay very niche focused. As a result, we got unbelievable traction in specific markets. As I said, by 2002 I got rid of every other business so that I could focus on further expansion of the nightlife part of the business.